Taxation, IAS 10, 37 and EPS Flashcards
Def tax - Asset Revaluation
Reval gains are recorded in OCI therefore any def tax arising on reval must also be recorded in OCI.
The temp diff in the CA will change but the tax base will remain.
rights issue bonus fraction steps?
step 1: Calculate TARP
step 2: bonus fraction Market price before issue/TERP
STEP 3: WANOS table
Step 4: EPS
Earnings calculation is its a group
Groups PAT - NCI
If the bonus issue was 1 share for every 5 the bonus fract would be?
6/5
Bonus issue fraction
New no. of shares / Old no. Of shares
what is a bonus issue fraction
free existing shares to existing shareholders
what is a rights issue
giving existing shareholders the right to buy shares
what is a rights issue bonus fraction
shares issued to existing shareholders at price below market value and not below nominal value
rights issue bonus fraction - equation?
MV per share / TARP
Adjustment of comparatives
previous year EPS x Inverse of bonus fract
If there is rights bonus fraction - you do the same (inverse it)
DEPS - purpose?
acts as a warning for shareholders
show the potential impact on EPS of future share issues arising as a result of instruments in issue at YEND.
Instruments to be considered are = convertible debts (loan stock, bonds) and share options
EPS vs DEPS
EPS takes into account a company’s common shares, whereas diluted EPS takes into account all convertible securities, such as convertible bonds or convertible preferred stock, which are changed into equity or common stock.
DEPS equation
basic EPS + Notional earnings / Basic No. Shares + notional no. shares
IAS 37 - What is a provision
is a liability of uncertain timing or amount
Liability is present obligation of the entity arising from past events
provision is recorded when
- present obligation from a past event
- probable outflow of economic benefit
probable outflow can be measured reliably
